Existing-home sales show no signs of life despite falling mortgage rates.
The National Association of Realtors reports Existing-Home Sales Rise 0.5 Percent in November.
Month-over-month sales increased in the Northeast and South, showed no change in the West, and fell in the Midwest. Year-over-year sales showed no change in the Northeast and South, and decreased in the Midwest and West.
Key Numbers
- Month-Over-Month: +0.5 percent to a seasonally adjusted annual rate of 4.13 million.
- Year-Over-Year: -1.0 Percent
- Inventory: 1.43 million units, down 5.9% from October and up 7.5% from November 2024 (1.33 million)
- Supply: 4.2-month supply of unsold inventory, down from 4.4 months in October and up from 3.8 months in November 2024.
- Median Sales Price: $409,200, up 1.2% from one year ago ($404,400) – the 29th consecutive month of year-over-year price increases.
“Existing-home sales increased for the third straight month due to lower mortgage rates this autumn,” said NAR Chief Economist Lawrence Yun. “However, inventory growth is beginning to stall. With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.”
Well, that didn’t happen. NAR seasonal adjustments are garbage. For four consecutive years the NAR shows seasonal increases between October and February. So, expect another couple of months of increases then declines.
Existing-Home Sales Supply
Despite all the moaning, supply of homes on a year-over-year basis is steadily rising, in both percentage terms and real terms give the flatline in sales.
Existing-home sales Median Sales Price
The trend in the median price of existing-homes is interesting in 2025.
In prior years, prices of all transactions peaked in June then slide towards December.
This year, there is a huge divergence between single-family and the overall median. The median price of single-family units has flatlined for 5 months.
Despite mortgage rates declining a full percentage point from 7.26 percent in mid-January to 6.29 percent in mid-December, existing home sales have gone virtually nowhere.
Home are still not affordable. Neither rising inventory nor falling mortgage rates have helped.
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In the allegedly best economy in history, people struggle with food, shelter, property taxes, and homeowner’s insurance.
Home sales are stagnant because no one can afford them. Youth and black unemployment has surged.
Health care costs are guaranteed to surge next year.
Yet, Trump goes on TV and tells everyone how great he is doing. Expect a further decline in his polling numbers.
The 30 year mortgage rate went from 3% from early 2022 to around 7% by late 2022.
So by summer of 2022 a lot of buyers were closing on sales with locked-in rate of nearly 3%.
By 2023, buyers hit a virtual wall as far as the rate of 7%.
Granted, some sellers could offer an assumable mortgage if they had FHA or VA loans and a low mortgage rate as an incentive to buyers.
No need for Nvidia in Chinal
….Chinese scientists have created a prototype machine capable of producing advanced semiconductor chips. They are the basis of artificial intelligence, smartphones, and weapons, and have been key to the West’s military advantage for years.
Reuters reported on this, citing its sources.
The prototype was completed in early 2025 and is currently being tested. The machine takes almost the entire area of one production workshop. According to two people familiar with the project, it was created by a team of former engineers from Dutch semiconductor giant ASML, who reverse-engineered the company’s extreme ultraviolet (EUV) lithography machines to recreate its technology.
Most likely, Huawei coordinates part of this network. The secrecy at the facility is at an all-time high, with engineers often sleeping on the job and working with limited access to their phones. ASML specialists were paid bonuses ranging from $420 to $700 thousand, issued fake IDs, and forced to work under false names.
The Chinese used reverse engineering: the prototype was built by disassembling old ASML machines purchased on the secondary market through intermediaries. Reuters sources also mention Nikon and Canon parts….
nice photo at the site
https://militarnyi.com/en/news/china-reproduced-asml-technology-and-is-moving-toward-domestic-production-of-advanced-chips/
“The affordable housing crisis” appears to just be massive currency depreciation, the shock of historically normal interest rates returning, an unprecedented increase in housing from artificially low “emergency” interest rates that stole years of sales from the future, wages that did not keep up with the Fed’s asset class inflation schemes of stonks and real estate for the wealthy, and Blackrock et. al real estate accumulation. What am I missing?
So assuming YOU were in charge of everything, what would you do to change this situation? Pay everyone $100/hr minimum so that they can afford a house?
How about causing the prices of houses (AKA fake “investment”) to tumble by making ALL interest payments non-deductible and removing all home deduction and/or capital gain exclusion tax benefits upon the sale of a home?
At the expense of repeating myself Mish, this is all very simple. From Summer of 2020 (Beginning of Pandemic more or less) through May of 2022, mortgage rates were incredibly low allowing buyers to buy more house than they normally could have. So, they did! And they bid up the price of homes, in general, by about 50 percent in those short two years. Once rates began to rise in the spring of 2022, and after, the number of home sales transactions fell off of a cliff, and haven’t returned, because the homes have all become too expensive.
So, there are 3 possible outcomes.
Since, normally, home prices appreciate at around 4 percent per year, the quick 50+ percent rise in prices happened over two years (from 2020 to 2022), we have approximately 11 years of price appreciation happening in only two years. Now it is about 3.5 years later, so, we have gone through 5 years of the 11.
Option 1 – Home sellers start dropping prices now. Those that want to move or have to move are doing so in my area (Houston, TX), but, they are not the majority, and they are mostly lower income/lower price point sellers. The average home now under $500 is selling for 12 percent less than it’s original list price.
Option 2 – People don’t move for another 6 years more or less, until incomes catch up with the current price of homes (assuming that prices don’t rise anymore, which I assume will be the case).
Option 3 – People wake the F up, and go ahead and sell their home at a slight discount to the market and take the incredible gift of the equity that they were able to build up with the absurd price rises from 2020 to 2022, and don’t worry themselves about current rates. The amount of money they have received in their equity growth will outweigh the difference in rates they need to pay now and if it’s time for them to move (new kid, new job, divorce, death, etc), then they ought to move and they will be ok.
Yes, their new home will be based on these prices, but, if they had a $500,000 home in the beginning of 2020, and had paid off 40 percent of their mortgage, they owed $300,000, but, their equity increased by over $250,000 (50 percent + rise in their home value).
My opinion is that all three of the above are going to happen and the number of transactions per year is probably bottoming out as we speak. If the economy goes into the tank big time in the near future, there will be more forced selling at the low end, as they are running out of money. If the economy doesn’t go into the tank, and the perception is that things are looking better, then it’s more likely that options 3 and 2 come to pass, and as the years pass, home prices don’t really go up very much, but, peoples salaries do, and the whole thing works itself out over the next 5 years.
Myself, I think sellers should be realistic and lower their prices by 10 percent to get their home moved, but, nobody likes to do that, even after they were just gifted a 50 percent rise in value over two years.
Lastly, there is not, and never was a “housing shortage”. This kind of craziness did not exist from 2015 to 2020, and was only caused by the temporary fall in rates to absurd levels, and now we are back in a “normal” mortgage rate regime. If it is true that millions of immigrants are being deported or voluntarily returning home, there is going to be an apartment and housing glut. But, I don’t really believe that all that many people are being deported overall. At my local gas station taco joint, it’s still full of undocumented immigrants happily working in the trades and eating tacos!
Option 3 is a mirage unless they are moving into an already paid for home (ie their parents died and they inherited a mortgage free home). Otherwise all their gain is just going to go to pay the new house (in your example the 500K home is now 750 but to buy the same home they had they will need to spend 750 so there is no ‘gain’ and in fact there is the ‘cost’ of moving which isn’t cheap).
Option 2 is what’s going to happen. I wrote above that by 2030 the Covid money would finish sloshing which is about 5 years from now which is close to your timeline that we are 4 of 11 years through now.
The flat line indicates the economy was getting really bad 3 years ago and has not improved. As inventory grows, someone is going to force prices to the downside by offering and accepting a price much lower than houses presently on the market. The sudden drop in prices could encourage existing sellers to yank inventory, which leads to even fewer home sold.
Yanking inventory appears to be accelerating; I think Denver was one of the top three cities for this in 2025.
This post made me reflect deeply on important things I often overlook
Nike down 10% today. The consumer is falling apart. Trump/GOP own it 100%
319 days till mid-terms for the bleeding to potentially slow down otherwise, this economy is gonna bleed out.
In fairness Nike has been a dumpster fire. Other retail exposed names have put out good numbers and the overall picture seems mixed.
Which ones? I’d like to check the math.
Nike
Jan 21 2025: $73.17 – Day after Trump took office
Dec 19 2025: $58.71 – Today
19.76% decrease.
I stocked up on enough Saucony Liberty model (now discontinued) during Covid Theater sales to last me the rest of my life.
I’m not sure Nike is a good bellwether on the consumer; that seems like a cherry-picked data point. I’d trust grocery sales data a lot more.
Real estate is local. The Northeast and Midwest are a seller’s market right now and have been for a few years ever since the supposed ‘crash’ in 2022.
Boise Idaho prices crashed in 2022 but since then they have steadily regained all those losses and are back at peak levels, ready to set new highs.
Louisiana had a dead housing market with weak price growth the last few years but this past year saw 5% YoY gains. All those other ‘cheap’ places like Kentucky and West Virginia have joined the bubble since the supposed ‘crash’ in 2022.
Despite the doom and gloom on the Florida and Texas housing markets, year over year prices there statewide are down less than 1% per Redfin, despite the fact some metros in those states saw significant drops.
Redfin is living in fantasy land.
https://www.youtube.com/watch?v=0q6N-1k-uio
Trillions of inflation invested in these homes. Until it is evaporated no recovery is possible.
Correct. It’s all the Covid money sloshing through the system. It should finish settling around 2030.